SMA

Technology Blog

Investment / Trading 101 – Introduction to trading

Investment / Trading 101 – Introduction to trading

This is the first article in series for beginners interested in stock, commodity and forex trading. In this article we will learn following concepts.

  1. What is trading.
  2. Basic rules of successful trading.
  3. Key ingredients of successful trading.
  4. Understating Financial Market.
  5. Understating Forex Market.
  6. Understanding Equity Market.
  7. Understanding Commodities Market.
  8. Derivatives Market.

You have to learn before you can earn.

What is trading?

In financial markets, trading is an exchange of goods between seller and buyer, where buyer receives the goods by compensating the seller. The compensation is normally in form of cash or currency and goods may also refer to currency, stock, shares or commodities. We can re-write the above definition as following.

Trading is to put your money to work to achieve your goals.

Golden rules of trading.

  • Never rely on luck and chances.
  • Plan, research and understand your investment, it will increase the chances of success.
  • Learn, what and when to trade.

Ingredients of successful trading

In this section we will explore what are the key elements of successful trading system.

Method

Market entry(buying) and exit (selling) decisions with the help of tools like.

Technical Analysis

Technical analysis is about determining the direction of an asset on the basis of it’s price.

Fundamental Analysis

Selecting an asset by comparing it with other assets.

Market Rumors

Market reports, rumors and trading signals.

Gut Feeling

Your own feeling about expected raise in currency X against currency Y.

Money Management

Money management is about controlling your market exposure. In other words money management is about amount used in a trade.

  • Specific amount of money used in a trade.
  • Specific amount of money that you can risk in each trade.
  • A Stop-Loss Order.

Psychology

Correct mental approach to control trader’s fear and greed is essential to successful trading.

What is Financial Market

Financial markets are the places where trading from different places and by different people took place, there are two types of financial market, regulated centralized and over the counter market.

Regulated centralized markets

Trading in regulated markets run through centralized exchange, examples of such exchanges are.

  • NYSE (New York Stock Exchange)
  • KSE (Karachi Stock Exchange)
  • LSE (London Stock Exchange)

Over the counter market

Over the counter market is composed of a network of dealers who link buyers with sellers.

Financial Markets by category

Financial markets are normally categorized as following.

Forex Market

Forex market is used for trading of different currencies. You can buy and sell one currency against another to make profit. Average volume of daily trade in forex market is around 5 trillion US dollars, making it the biggest financial trading market of the world.

Commodities Market

Trading of commodities like sugar, gold, other precious metals, grains and oil etc took place in Commodities market.

Stock Market

Also known as equity market, stock market is used for trading of shares of different companies like Microsoft, Google and Facebook.

Derivatives Market

Trading of valuable financial contracts is made in Derivatives market.

This article is part of a series on Beginner’s guide to online stock, forex and commodity trading.

You like this article, have any questions or suggestions please let us know in the comments section.

Thanks and Happy Learning!

** Thumbnail and Post Image Designed by rawpixel.com / Freepik

Prev post Beginner's guide to online stock, forex and commodity trading
Next post Forex Trading - Introduction to forex trading

Shoket Mahmood Ahmed

Related Posts

147 thoughts on “Investment / Trading 101 – Introduction to trading”

  11. Sociosqu ad litora torquent per conubia nostra, per inceptos himenaeos. Donec eu mollis felis, a maximus augue. Phasellus mi dui, tincidunt id venenatis vel, luctus quis lorem. Curabitur a ante non leo eleifend pretium. Vivamus efficitur ex varius dignissim imperdiet. Arlana Emery Gerti

  12. After looking over a few of the articles on your website, I truly appreciate your technique of writing a blog. I saved as a favorite it to my bookmark webpage list and will be checking back soon. Take a look at my web site too and let me know what you think. Celie Roland Kerr

  13. I do trust all the concepts you have presented to your post. They are really convincing and can definitely work. Nonetheless, the posts are very short for starters. Could you please lengthen them a little from next time? Thanks for the post. Kelley Artie Brest

  16. When, while the lovely valley teems with vapour around me, and the meridian sun strikes the upper surface of the impenetrable foliage of my trees, and but a few stray gleams steal into the inner sanctuary. Sarina Ebenezer Orling

  17. After all, we should remember compellingly reintermediate mission-critical potentialities whereas cross functional scenarios. Phosfluorescently re-engineer distributed processes without standardized supply chains. Quickly initiate efficient initiatives without wireless web services. Interactively underwhelm turnkey initiatives before high-payoff relationships. Holisticly restore superior interfaces before flexible technology. Kiersten Felike Raoul

  19. whoah this weblog is fantastic i like studying your articles. Stay up the great work! You know, a lot of persons are searching round for this information, you could help them greatly. | Dani Booth Rosaline

  26. A fascinating discussion is definitely worth comment. I do believe that you ought to write more on this topic, it might not
    be a taboo matter but generally people don’t discuss
    such issues. To the next! Many thanks!!

  27. I in addition to my guys were actually going through the good hints on your web site and so then came up with a terrible feeling I had not thanked the web blog owner for those strategies. These guys were certainly glad to study them and already have simply been using these things. Appreciate your actually being simply considerate and then for going for variety of incredible subject matter most people are really needing to discover. My very own sincere apologies for not expressing appreciation to sooner. Madeline Rick Norvil

  28. On the rocker part, I am not sure what I was going for with that, but I was going for some sort of word play. On the goo it was a typo and now shows good. Thanks for that. It is so hard to proof your own work. Cherida Andrea Heintz

  31. An interesting discussion is worth comment. I think that you should write more on this topic, it might not be a taboo subject but generally people are not enough to speak on such topics. To the next. Cheers Rosie Augusto Daisey

  34. Thousands of you have already taken advantage of this service where we bundle all these activities and give you a discount to perform these services. Of course we do these things year round, but in the spring when most clients need it we do it for a reduced price. Elayne Shepard Derriey

  35. Having read this I thought it was rather informative. I appreciate you taking the time and energy to put this content together. I once again find myself spending a significant amount of time both reading and leaving comments. But so what, it was still worth it. Doralin Euell Bruner

  36. I am not sure where you are getting your info, but great topic. I needs to spend some time learning more or understanding more. Thanks for great information I was looking for this info for my mission. Cecil Broderic Glenn

  37. Why? Well, take into account that during a regular 90 minute soccer game, you are running at different speeds, including sprints, up to six miles each game. Clarissa Dare Lieberman

  40. Just desire to say your article is as surprising. The clearness in your post is simply great and i could assume you are an expert on this subject. Fine with your permission allow me to grab your feed to keep updated with forthcoming post. Thanks a million and please keep up the rewarding work. Tamra Romain Abdulla

  42. The foreign exchange market is where currencies are traded. Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade . thanks.

  45. I wish to express my affection for your generosity for men who actually need help on this important situation. Your special commitment to passing the solution all-around had been rather functional and has consistently allowed ladies just like me to reach their targets. Your entire warm and helpful report denotes a great deal to me and even more to my mates. Thanks a lot; from all of us. Calla Parsifal McAfee

  49. This has actually truly captured my interest in a manner that the majority of blog sites can not. Your special perspective has me captivated. Are you most likely to write a lot more on this topic? If so, I hope that I will certainly be lucky enough to read it. Esmaria Randall Tamaru

  52. I would like to thnkx for the efforts you have put in writing this web site. I am hoping the same high-grade site post from you in the upcoming as well. Actually your creative writing skills has encouraged me to get my own blog now. Really the blogging is spreading its wings rapidly. Your write up is a good example of it. Ileana Isidore Stafford

  57. I think this is one of the most significant info for me. And i am glad reading your article. But should remark on few general things, The site style is perfect, the articles is really nice : D. Good job, cheers Andi Boigie Hurlee

  59. Unquestionably believe that which you said. Your favorite reason appeared to be on the web the easiest thing to be aware of. I say to you, I definitely get irked while people consider worries that they just do not know about. You managed to hit the nail upon the top as well as defined out the whole thing without having side-effects , people can take a signal. Will probably be back to get more. Thanks Aubrie Kerwin Rains

  63. I blog often and I really appreciate your information. Your article has truly peaked my interest. I am going to bookmark your site and keep checking for new details about once per week. I opted in for your Feed as well. Audrie Alexandr Roldan

  66. Pershendetje! Gjithmone e kam patur pasion te hy ne boten e modelingut dhe pse asnjeher skam tentuar ta bej realitet kte gje. Shpresoj te me jepni mundesine qe kete pasion kete enderr ta bej realitet. Per me shum keni adresen e emailit dhe nqs ju nevojiten mund tju dergoj foto te miat dhe masat trupore. Faleminderit! Yetty Vittorio Rex

  69. Thanks for your tips. One thing we have noticed is always that banks and also financial institutions have in mind the spending behavior of consumers and also understand that a lot of people max out there their own credit cards around the holiday seasons. They prudently take advantage of this kind of fact and begin flooding the inbox and also snail-mail box together with hundreds of no interest APR credit cards offers shortly after the holiday season closes. Knowing that for anyone who is like 98% in the American general public, you’ll soar at the one opportunity to consolidate consumer credit card debt and switch balances towards 0 interest rate credit cards. nmmlkno https://headachemedi.com – best headache med

  73. Its like you read my mind! You appear to know so much about this, like you wrote the book in it or something. I think that you can do with a few pics to drive the message home a bit, but other than that, this is wonderful blog. A fantastic read. I will definitely be back. Heloise Weidar Elvera

  74. I had been honored to obtain a call from a friend as he found the important guidelines shared on the site. Browsing your blog post is a real wonderful experience. Thanks again for thinking of readers like me, and I hope for you the best of achievements as being a professional discipline. Antonina Gal Sladen

  75. Thanks for your concepts. One thing we’ve noticed is banks along with financial institutions are aware of the spending practices of consumers while also understand that most of the people max out and about their real credit cards around the getaways. They properly take advantage of this specific fact and commence flooding your current inbox along with snail-mail box using hundreds of no-interest APR card offers just after the holiday season concludes. Knowing that should you be like 98% of American community, you’ll rush at the possible opportunity to consolidate card debt and shift balances for 0 apr interest rates credit cards. kjjiikm https://thyroidmedi.com – what is the treatment of hypothyroidism

  85. Accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident. Shawna Nathan Fanestil

  87. Thanks for your ideas. One thing I have noticed is that banks and financial institutions know the spending habits of consumers and understand that most people max out their credit cards around the holidays. They wisely take advantage of this fact and start flooding your inbox and snail-mail box with hundreds of 0 APR credit card offers soon after the holiday season ends. Knowing that if you are like 98% of the American public, you’ll jump at the chance to consolidate credit card debt and transfer balances to 0 APR credit cards. cbbbbbi https://stomachmedi.com – stomach pain medications

  96. Thanks for your article. One other thing is that if you are disposing your property by yourself, one of the difficulties you need to be conscious of upfront is how to deal with household inspection reviews. As a FSBO vendor, the key concerning successfully moving your property plus saving money about real estate agent commissions is understanding. The more you recognize, the better your property sales effort will be. One area in which this is particularly essential is inspection reports. Vivi Tucker Bergeron

  97. Thanks for your tips. One thing we have noticed is always that banks and also financial institutions have in mind the spending behavior of consumers and also understand that a lot of people max out there their own credit cards around the holiday seasons. They prudently take advantage of this kind of fact and begin flooding the inbox and also snail-mail box together with hundreds of Zero APR card offers immediately after the holiday season comes to an end. Knowing that in case you are like 98% of all American open public, you’ll leap at the opportunity to consolidate credit debt and move balances to 0 annual percentage rates credit cards. eddddfj https://pancreasmedi.com – best stomach drugs

  99. Is there any risk when investing with TRADER? From what I have read, it really is a very good option, precisely because of that I hope there are no problems. Good luck guys. Gretel Schuyler Palladin

  100. Thanks for ones marvelous posting! I truly enjoyed reading it, you can be a great author. I will be sure to bookmark your blog and will come back in the foreseeable future. I want to encourage you to ultimately continue your great job, have a nice day! Donnie Salvador Zoba

  104. This is very interesting, You are a very skilled blogger. I have joined your feed and look forward to seeking more of your excellent post. Also, I have shared your website in my social networks!| Meghan Zebulen Takashi

  105. Good post. I learn something new and challenging on blogs I stumbleupon everyday. It will always be helpful to read through articles from other writers and use a little something from their web sites. Margalit Malcolm Berners

  106. Vitae quia adipisci ad consequatur voluptate aspernatur optio. Vel error iure enim atque laboriosam aliquam odio soluta. Similique possimus qui non mollitia sed est necessitatibus. Hic voluptatum id voluptatem vitae autem ex voluptas. Alexine Waldemar Trillbee

  107. Wow, marvelous blog layout! How long have you been blogging for? you make blogging look easy. The overall look of your web site is magnificent, as well as the content!| Justine Garrard Somerset

  112. Sed reprehenderit quam, non felis, erat cum a, gravida lorem a. Ultricies in pellentesque ipsum arcu ipsum ridiculus velit magna, ut a elit est. Ultricies metus arcu sed massa. Massa suspendisse lorem turpis ac. Fayre Jefferey Adriene

  114. I am so glad you stopped in and took the time to comment and leave your input. I love to hear when folks like kayaking. It really is a great way to get outdoors. Thank you for taking the time to stop in and leave your input. I am glad I could help you get more of an understanding of what a dry bag is and how they are used. Celle Towney Neill

  119. I think youve created some actually interesting points. Not as well many people would basically think about this the way you just did. Im truly impressed that theres so very much about this topic thats been uncovered and you did it so nicely, with so a lot class. Superior one you, man! Actually excellent things here.

  123. There are some attention-grabbing time limits in this article but I dont know if I see all of them middle to heart. There is some validity however I’ll take hold opinion till I look into it further. Good article , thanks and we would like extra! Added to FeedBurner as nicely

  126. I found your blog site on google and verify a few of your early posts. Continue to keep up the superb operate. I just extra up your RSS feed to my MSN Information Reader. Seeking ahead to studying more from you later on!

  127. Can I just say what a relief to find somebody who actually knows what they are talking about on the web. You actually realize how to bring a problem to light and make it important. More and more people must check this out and understand this side of the story. I was surprised you are not more popular given that you most certainly possess the gift. Galina Sterling Dimitris

  134. I’m not sure exactly why but this weblog is loading extremely slow for me. Is anyone else having this problem or is it a problem on my end? I’ll check back later on and see if the problem still exists.|

  141. It is perfect time to make some plans for the future and it is time to be happy. I’ve read this post and if I could I want to suggestyou few interesting things or suggestions. Perhaps you could write next articles referring to this article. I desire to read even more things about it!

  142. Hi there, MegaCool blog mate, I really loved this page. I’ll be sure to talk about this to my cousin who would, odds are, love to check out this post too. Found this sites post through the Bing search engine by the way, incase you were curious. Many thanks for the wonderful read!

  143. Hi there, just became alert to your blog through Google, and found that its really informative. I’m gonna watch out for brussels. I will appreciate if you continue this in future. Numerous people will be benefited from your writing. Cheers!

Leave a Reply

Back to top